Barnes & Noble reports that consolidated revenue for the third quarter of fiscal 2014 decreased 10.3% to $2 billion from the same period in the previous fiscal year. B&N’s retail segment (B&N bookstores and BN.com) reported $1.4 billion in revenue, a decrease of 6.3% from the same period in fiscal 2013, and B&N college revenues declined 6% in the quarter to $486 million. B&N third quarter EBITDA increased from $59 million a year ago to $173 million, partially due to lower expenses in its troubled Nook division.
B&N announced plans to release a new Nook color device in 2015 and reported that losses at the Nook division decreased by 50% to $157 million for the quarter on content sales of $57 million, a decline of 26.5% from a year ago. Nook device and accessory sales were down 58.2% to $100 million for the quarter. The B&N retail segment reported comparable store sales declined primarily due to lower sales of Nook products and core comparable bookstore sales, which do not include Nook products, decreased 0.5% for the quarter, an improvement over the beginning of the fiscal year.
B&N CEO Michael P. Huseby said B&N “significantly improved its balance and bottom line,” during the third quarter. He noted that the company's comparable store sales “benefited from a strong title line-up, strong execution and an effective advertising campaign. College entered into the spring back-to-school rush and saw continued growth in its higher margin textbook rental business.” Huseby also said that, “Nook losses narrowed significantly as we achieved our objective of selling through much of our pre-holiday device inventory, while managing promotions to optimize sales.”
Huseby noted the company’s efforts to minimize continued loses from the Nook division, noting recent layoffs in the division. He continued to emphasize the importance of being able to offer consumers Nook-branded devices, and that the company is revamping its device production; he also suggested there could be “additional actions” in the Nook division
“We have taken steps to reduce costs and device exposure, while focusing our efforts to reverse the content sales decline,” Huseby said. “We remain committed to delivering world-class reading experiences to our customers through our reading centric e-Ink and color reading devices. The Company is actively engaged in discussions with several world-class hardware partners related to device development as well as content packaging and distribution. As a result, we plan to launch a new Nook color device in early fiscal 2015.”
